China Flavors & Fragrances Co Ltd CAPEX dropped on 16.0% in 2015 and Revenue decreased slightly on 0.64%
14/03/2016 • About China Flavors & Fragrances Co Ltd (
$3318) • By InTwits
China Flavors & Fragrances Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Flavors & Fragrances Co Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 26.1%. At the same time it's in pair with industry average of 27.6%.
- CAPEX is quite volatile: 250 in 2015, 298 in 2014, 138 in 2013, 99.5 in 2012, 120 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Flavors & Fragrances Co Ltd ($3318) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 731.9 | 628.5 | 687.5 | 702.7 | 698.2 | -0.6% |
| Gross Profit | 302.3 | 294.1 | 334.1 | 336.0 | 341.3 | 1.6% |
| SG&A | 224.6 | 221.5 | 236.5 | 253.7 | 264.8 | 4.4% |
| EBITDA | 106.6 | 101.4 | 121.6 | 97.1 | 99.1 | 2.0% |
| Net Income | 56.5 | 58.8 | 75.1 | 68.2 | 71.5 | 4.9% |
Balance Sheet
|
|---|
| Cash | 135.6 | 243.1 | 179.7 | 148.0 | 214.1 | 44.7% |
| Short Term Debt | 20.0 | | 0.0 | 30.0 | 148.5 | 395.0% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 18.3 | |
Cash flow
|
|---|
| Capex | 119.8 | 99.5 | 138.1 | 297.8 | 250.1 | -16.0% |
Ratios
|
|---|
| Revenue growth | 8.2% | -14.1% | 9.4% | 2.2% | -0.6% | |
| EBITDA growth | 3.4% | -4.8% | 19.9% | -20.1% | 2.0% | |
| Gross Margin | 41.3% | 46.8% | 48.6% | 47.8% | 48.9% | 1.1% |
| EBITDA Margin | 14.6% | 16.1% | 17.7% | 13.8% | 14.2% | 0.4% |
| Net Income Margin | 7.7% | 9.3% | 10.9% | 9.7% | 10.2% | 0.5% |
| SG&A, % of revenue | 30.7% | 35.2% | 34.4% | 36.1% | 37.9% | 1.8% |
| CAPEX, % of revenue | 16.4% | 15.8% | 20.1% | 42.4% | 35.8% | -6.6% |
| ROIC | 8.2% | 6.9% | 8.5% | 6.9% | 5.4% | -1.5% |
| ROE | 6.6% | 6.2% | 7.2% | 6.2% | 5.7% | -0.5% |
| Net Debt/EBITDA | -1.1x | -2.4x | -1.5x | -1.2x | -0.5x | 0.7x |
Revenue and profitability
China Flavors & Fragrances Co Ltd's Revenue decreased slightly on 0.64% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.6 pp from 16.0% to 18.6% in 2015.
Gross Margin increased slightly on 1.1 pp from 47.8% to 48.9% in 2015. SG&A as a % of Revenue increased slightly on 1.8 pp from 36.1% to 37.9% in 2015.
Net Income marign increased slightly on 0.54 pp from 9.7% to 10.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
China Flavors & Fragrances Co Ltd's CAPEX/Revenue was 35.8% in 2015. China Flavors & Fragrances Co Ltd showed fast CAPEX/Revenue growth of 20.0 pp from 15.8% in 2012 to 35.8% in 2015. It's average level of CAPEX/Revenue for the last three years was 32.8%.The company has spent a lot to CAPEX (252% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (5.41%) and ROE (5.68%). ROIC decreased slightly on 1.5 pp from 6.9% to 5.4% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.5x and Debt / EBITDA is 1.7x. Net Debt / EBITDA surged on 0.7x from -1.2x to -0.5x in 2015. Debt jumped on 456% in 2015 while cash surged on 44.7% in 2015.
Appendix 1: Peers in Chemicals
Below you can find China Flavors & Fragrances Co Ltd benchmarking vs. other companies in Chemicals industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Bestway International Holdings Ltd ($718) | | -25.4% | -62.1% | 330.3% | 238.4% |
| Jilin Qifeng Chemical Fiber Co Ltd ($549) | 39.7% | -33.6% | 5.5% | 29.1% | |
| China XLX Fertiliser Ltd ($1866) | | 7.0% | 0.6% | 28.0% | 13.9% |
| Century Sunshine Group Holdings Ltd ($509) | 49.2% | 68.7% | 32.0% | 26.4% | |
| Landing International Development Ltd ($582) | -50.7% | 2.1% | 15.9% | 23.3% | |
| |
|---|
| Median (31 companies) | 30.9% | 2.1% | 10.1% | 1.4% | 1.2% |
|---|
| China Flavors & Fragrances Co Ltd ($3318) | | -14.1% | 9.4% | 2.2% | -0.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huabao International Holdings Ltd ($336) | 74.3% | 70.5% | 69.1% | 70.8% | 69.9% |
| Smartac Group China Holdings Ltd ($395) | 17.3% | -1.8% | 11.2% | 40.4% | |
| Bracell Ltd ($1768) | 40.1% | 30.5% | 37.3% | 37.3% | 38.4% |
| Yingde Gases Group Co Ltd ($2168) | 34.2% | 31.7% | 31.0% | 32.1% | |
| Century Sunshine Group Holdings Ltd ($509) | 17.9% | 26.7% | 31.0% | 31.8% | |
| |
|---|
| Median (31 companies) | 19.8% | 18.2% | 16.2% | 16.0% | 30.7% |
|---|
| China Flavors & Fragrances Co Ltd ($3318) | 41.3% | 46.8% | 48.6% | 47.8% | 48.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huabao International Holdings Ltd ($336) | 66.4% | 63.8% | 59.1% | 60.0% | 58.3% |
| Bracell Ltd ($1768) | 30.1% | 22.3% | 30.8% | 38.2% | 35.9% |
| Yingde Gases Group Co Ltd ($2168) | 32.3% | 29.4% | 29.8% | 32.3% | |
| China First Chemical Holdings Ltd ($2121) | 29.7% | 26.6% | 30.0% | 29.6% | |
| Century Sunshine Group Holdings Ltd ($509) | 15.5% | 24.2% | 28.1% | 27.6% | |
| |
|---|
| Median (31 companies) | 15.5% | 13.2% | 12.7% | 11.1% | 15.8% |
|---|
| China Flavors & Fragrances Co Ltd ($3318) | 14.6% | 16.1% | 17.7% | 13.8% | 14.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Landing International Development Ltd ($582) | 27.9% | 7.2% | 29.6% | 419.5% | |
| China Zenith Chemical Group Ltd ($362) | 36.8% | 147.3% | 55.7% | 67.4% | 152.2% |
| Smartac Group China Holdings Ltd ($395) | 22.5% | 14.0% | 4.7% | 49.3% | |
| Bracell Ltd ($1768) | 24.4% | 22.3% | 64.3% | 35.4% | 11.7% |
| China XLX Fertiliser Ltd ($1866) | 13.0% | 30.1% | 41.1% | 32.1% | 22.0% |
| |
|---|
| Median (31 companies) | 8.3% | 7.2% | 8.3% | 5.1% | 6.7% |
|---|
| China Flavors & Fragrances Co Ltd ($3318) | 16.4% | 15.8% | 20.1% | 42.4% | 35.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Huabao International Holdings Ltd ($336) | 34.6% | 28.7% | 25.2% | 26.2% | 23.3% |
| Tiande Chemical Holdings Ltd ($609) | 24.4% | 26.2% | 29.4% | 20.7% | 20.6% |
| Century Sunshine Group Holdings Ltd ($509) | 3.5% | 11.3% | 15.9% | 16.4% | |
| Fufeng Group Ltd ($546) | 13.9% | 9.6% | 10.8% | 11.6% | |
| Yingde Gases Group Co Ltd ($2168) | 14.7% | 10.6% | 11.5% | 11.5% | |
| |
|---|
| Median (31 companies) | 7.8% | 6.9% | 7.4% | 5.2% | 7.4% |
|---|
| China Flavors & Fragrances Co Ltd ($3318) | 8.2% | 6.9% | 8.5% | 6.9% | 5.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Sanjiang Fine Chemicals Co Ltd ($2198) | 2.4x | 2.2x | 4.6x | 18.1x | |
| China XLX Fertiliser Ltd ($1866) | 2.4x | 2.6x | 5.1x | 5.8x | 5.1x |
| Ngai Hing Hong Co Ltd ($1047) | 4.8x | 11.7x | 5.3x | 5.4x | 5.3x |
| Jilin Qifeng Chemical Fiber Co Ltd ($549) | 4.3x | 14.1x | 6.5x | 5.3x | |
| Sinofert Holdings Ltd ($297) | 4.3x | 2.9x | 32.4x | 5.0x | |
| |
|---|
| Median (24 companies) | 1.5x | 1.9x | 2.5x | 1.5x | 0.3x |
|---|
| China Flavors & Fragrances Co Ltd ($3318) | -1.1x | -2.4x | -1.5x | -1.2x | -0.5x |
